Help with Halifax Overdraft

paulburns1984

Hello all, hope you can help me,

After years of being ripped off by Nationwide building society, i finally made the switch to an interest free overdraft - at Halifax. In order to be able to get the account I had to up my credit rating (Not important but for those interested I used the Capital One Classic card). I now have a credit score of 99 out of 100 - which according to credit expert is exceptional.

So I got my halifax account and transfered debits but they had to open me a normal current account until the debits were transfered and then convert my account into a student account.

They have now changed it to student account but I still stuck with the 250GBP overdraft of the current account, when the minimum is supposed to be 1000GBP. I tried ringing today but couldn't get through to anyone so will try again tommorow.

The main issue is that they have said that up to 2500 is available as an overdraft, I applied to up it to 2000 and got rejected. The clerk said it's based on previous history with Halifax but surely this is unfair as I have only just become one of their customers, Why can't they look at my credit rating and use that.

I'm quite new to this and feel harshly done by that I left school without any knowledge of bank accounts - what ways can talk/argue/persuade them that I should be able to get a larger overdraft?

I am getting 1800GBP every 3 months from student loans and also work part-time earning roughly 400GBP a month so paying back any overdraft is not a problem, the reason i want the overdraft btw is to fund the purchase of an apple laptop at 1200 pounds.

paulburns1984

Also can i just ask - if halifax do not give me a suitable overdraft, is it legal to open up another student account with interest free overdraft at another bank?

adidas

Hi Paul

With regards to question about Halifax - I also have a student account with Halifax and I have been given a overdraft of £1k. I did apply for a higher limit but was rejected. I have banked with them in the past but I have closed the accounts (I had a regular saver during my gap year to save money).

If you search the forums you'll find lots of info about Halifax and their overdrafts. From what I have read, they rarely automatically give the advertised maximum amount. People who have reported getting it usually get it in their second yr and it depends on things like how much money is paid into the account. But it is really hard to get and I certainly wouldn't be worried if you haven't been given it!

I have been rejected for credit cards in the past and the only reason I can think of (after checking with Experian) is the amount of overdraft I have used in other accounts. I have read credit card articles which recommend that you only have less than 50% of your total available credit limit taken up with debt and the lower the better. For example, you have say, £10,000 available credit on a credit card and you have £8k of debt, this will look a lot worse than say £1k of debt with a credit limit of £10k. It shows you are not struggling and having to use all available credit and therefore more likely to get credit. So you might want to look into that (don't know how much credit available/debt you have on your credit cards etc).

Furthermore, there's no such thing as a true 'credit score' different companies look at different things in order to decide whether to lend money to you. This is why you might be accepted by some companies and rejected by others. Things like credit expert will simply give you an indication of your acceptability for credit.

Unfortunately, although it is unfair this is the way the banks work. You can get your overdraft limit up by paying money in to the account regularly and then you can apply say 6 months or so down the line.

I have 2 student accounts, one with Natwest (£1,600 OD - in my 3rd year) and one with Halifax (£1,000 OD). To my knowledge there is nothing from stopping you doing this. I read the small print and Natwest stipulate my main source of funding has to go into the account which is my student loan. Halifax stipulate that a student loan or grant cheque can be paid in. So I pay my grant cheque into that account. Do be careful though as some banks stipulate you can only have one student account and if you have another they will close your account down if they find out. Several people on the forums have suggested you can get around this by making sure you regularly pay money into both accounts. You could seperate your work from student loan money and pay them into seperate accounts. This is rather a grey area and I don't think you're *really* meant to do it, but best to ask your bank.

I hope that covers everything!

jennifernil

Our daughter is in the 5th year of her Halifax account. She was first given a £1000 overdraft limit, which she never used. Then it was increased to £1250, still she never used it.

Now in year 5 she has been waiting 3 months for her PhD funding to come through. So she asked Halifax to increase her overdraft as now she was up to the limit. They refused. Why? Because she had no regular deposits into the account!

AAARRRGH! If she had regular deposits then she would not need the overdraft! Stupid people!

So we (2 OAPs) are currently keeping her. I told Halifax I was not impressed. I got a long story about her ability to pay back an overdraft. She has over £3000 in one of their ISAs, can they not see she has money!?

She also owns her own flat! (with no mortgage)

adidas

The bank has to see that you are paying regular money in even if you withdraw it immediately as it one of the terms and conditions of the account. They could technically close your account down completely, never mind not increase your overdraft limit. When credit checks are down the company looks at all your accounts that have credit facilities, ie. things like credit cards and overdrafts. It cannot see that you have savings accounts only the accounts with overdrafts. They would not be able to see that there is money in the ISA account.

To up the overdraft you can transfer say £1000 into the account regularly and immediately withdraw it. They just need to see that money is coming into the account. This is how they make it profitable as they use the funds for other banking activities and it is why they offer the interest free overdraft as an incentive for you to do this. As I said Halifax are not the best with overdrafts, as they are difficult to get. Perhaps you could ask your daughter to try a different bank (read the student bank accounts article http://www.moneysavingexpert.com/banking/Student-bank-account and it'll give you an idea of who might be best to try, but again you will have to make regular payments before you get a large overdraft so don't expect it immediately).

jennifernil

Yes, I know how it works, it just seems rediculous that they cannot be flexible enough in cases like this. She has had money coming into the account regularly for 4 years, this "blip" is not of her making but down to the fact that the University and the company sponsoring the research were still arguing over details of the contract 4 months after she was selected for the PhD.
Her funding should now be in her account within a few days, 3 months in one go and then monthly. So that will clear her overdraft immediately. Then I reckon she should change to a high interest current account as the student account interest rate is rubbish. And anyway the Halifax only lets you have a student account for a maximum of 6 years.

paulburns1984

Well given the advice, I intend to open another student bank account.

I can put my 1800 every 3 months into halifax, next one due 13 jan, so that should keep them happy, and then put my 400 a month into another student account.
If I can get an overdraft with another bank, then that'll give me 2000 and i only need 1200 for my laptop so i'll be sorted.

What do I need to talk to my bank before I do this? The halifax stipulated that my student loan should go in here, which it will, but my work money can go elsewhere,

Quick question, when they say they want it paid into my account, is it important for them that it goes direct from student loans? Because it is currently going into another account and then I would straight away transfer the 1800 into halifax, but it wont say from ' student loans company' - is that important?

jennifernil

I don't think it matters where it comes from. Our daughter did not have a student loan, her monthly income was from us and her part-time job.

ratcrazy

I have a student account with the halifax. I got my overdraft by showing them the payment schedule for loans/grants - they said they couldn't give me more overdraft without seeing it to show money was going to go into the account:)

adidas

Sorry haven't logged on in a few days - paulburns: I just said that you should check with your bank because it says you have to get your main source of income paid into the (student) account, and I was unsure if you could have other sources paid into the account (to count as regular income). But I think it's OK.

shorty0100397_2

Hi, i set up with halifax having already been with them for a while. I called up to set me a student account which they sent the wrong card and set up the wrong account. So I rang them again and they sent me totally different details and different info. So I rang again finally got through to a decent person and they cancelled what ever they set up and sent me the correct account

When it came to my overdraft I saw they only gave me £100. I rang them up again!!!! Asked them to increase it they said they cant due to the other account i had which have overdrafts. (1 with 500 interest o/d and another with 200 interest o/d). So i rang them again..... They said the same so I hung up and rang them again, Halifax suddenly had a change of heart and magically increased it to £1000, which was not what the website says but hey. Its ok for how.

Anyway, my question is... Is it possible to take out this Overdraft and put it in my ica. This way gaining interest as the student one is interest free. Or would that class as a bad thing to do.???

Thanks